QuickBooks uses payroll items to track individual amounts on a paycheck and accumulate year-to-date (YTD) wage and tax amounts for each employee. There are payroll items for compensation, taxes, other additions and deductions, and company-paid expenses. You can assign these payroll items to different accounts as needed.
When the payroll feature is turned on, QuickBooks creates payroll items for Federal taxes and Earned Income Credit (EIC) for you. You can also edit the payroll items depending on your preference. To do this:
- Go to the Lists menu, then select Payroll Item List.
- Right-click on the appropriate item, then choose Edit Payroll Item.
- Make any necessary changes to the Payroll Item Name, the Liability/Expense Account Associated with the item, How to Calculate the item, and/or Default Rates and Limits (Rates and Limits entered here will affect all employees).Note: You can't edit the payroll item type. If you want to change it, create a new payroll item.
- Select Next until you can select Finish.